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Net Present Value - Unequal Lives Dakota Mining Company has two competing proposals: a diamond core drill or a hydraulic excavator. Both pieces of equipment
Net Present ValueUnequal Lives
Dakota Mining Company has two competing proposals: a diamond core drill or a hydraulic excavator. Both pieces of equipment
have an initial investment of $ The net cash flows estimated for the two proposals are as follows:
The estimated residual value of the diamond core drill at the end year is $
This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and
input your answers in the questions below.
Open spreadsheet
Determine which equipment should be favored, comparing the net present values of the two proposals and assuming a
minimum rate of return of If required, round to the nearest dollar.
Which project should be favored?
Diamond Core DrilDakota Mining Company has two competing proposals: a diamond core drill or a hydraulic excavator. Both pieces of equipment have an initial investment of $ The net cash flows estimated for the two proposals are as follows:
Year Net Cash Flow
Diamond Core Drill Net Cash Flow
Hydraulic Excavator
$ $
The estimated residual value of the diamond core drill at the end of Year is $
This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the questions below.
Determine which equipment should be favored, comparing the net present values of the two proposals and assuming a minimum rate of return of If required, round to the nearest dollar.
Line Item Description Diamond Core Drill Hydraulic Excavator
Net present value fill in the blank of $
fill in the blank of $
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